Is it wise to transfer Home loan for 0.5% ROI difference?

[mrrinmoy.saha]

I have existing home loan with ICICI Bank with 8.9% ROI. Current outstanding amount is 25.5 lakh rupees. Axis bank is offering me 8.4% ROI with zero processing fee (But MOD and other charges are there around ₹7k). No foreclosure charges from ICICI Bank. Should I take the headache to transfer the loan?

 

[aayusharyan]

I have existing home loan with ICICI Bank with 8.9% ROI. Current outstanding amount is 25.5 lakh rupees. Axis bank is offering me 8.4% ROI with zero processing fee (But MOD and other charges are there around ₹7k). No foreclosure charges from ICICI Bank. Should I take the headache to transfer the loan?

Do you plan to foreclose the new loan with part pre payments or do you plan to use the regular EMI approach. If you plan to foreclose, then there is no point in transferring anyway as you won't be paying much interest. (Again, you need to crunch your own numbers here).

Based on that, calculate the total difference in interest on your loan. To do that, the remaining loan tenure is also needed.
Once you have the savings calculated, then offset the MOD charges and all.
Then that money will be technically yours if you were to switch the loan. Then compare that with your lifestyle, is it worth it to do that?
For example, for some people 50K savings might not be worth the hassle to do this, but for others, it might be a pretty good savings.

 

[mrrinmoy.saha]

Do you plan to foreclose the new loan with part pre payments or do you plan to use the regular EMI approach. If you plan to foreclose, then there is no point in transferring anyway as you won't be paying much interest. (Again, you need to crunch your own numbers here).

Based on that, calculate the total difference in interest on your loan. To do that, the remaining loan tenure is also needed.
Once you have the savings calculated, then offset the MOD charges and all.
Then that money will be technically yours if you were to switch the loan. Then compare that with your lifestyle, is it worth it to do that?
For example, for some people 50K savings might not be worth the hassle to do this, but for others, it might be a pretty good savings.

I don't have a plan for part payment recently. It will be a EMI as usual. Just want to transfer the loan to Axis bank as I have Priority Salary account and they are offering 0.5% less ROI.

 

[techsearch]

did you transfer or not ? please share your reasons

 

[kjs]

Same. I have at 8.9% at ICICI. The most pathetic banking service ever experienced. I am soon planning to shift to either sbi (already ready for 8.4%) or bob (need to check). At hdfc they are restricting part payment to 3 4 times max in a year subject to minimum 2 emis that is so pathetic. Personal experience says for any kind of loan just choose public sector banks

 

[bhaviks]

For a 30 year, 1 Cr loan, even a difference of 0.5% can mean saving 4 years of tenure and 39 lacs in interest payable